Andrew Carnegie was a large stockholder in the Columbia Oil Company.
Carnegie believed that the oil fields would quickly run dry
because of all the drilling. He persuaded Columbia Oil to dig a huge hole
to store 100,000 barrels of oil so that they could make a killing
when the country's wells went dry. Luckily there was more oil than they
thought! But don't feel too sorry for Carnegie, he didn't let the setback
slow him down very much, and went on to make his millions in the steel
industry.
In contrast, "Colonel" Drake was committed to the oil business. He
scoured the country looking for customers willing to buy his crude oil.
However, the bad smell, muddy black color, and highly volatile
component, called naphtha, caused few sales. It became obvious that one
would have to refine the oil to find a market.
Early Refining
By 1860 there were 15 refineries in operation. Known as "tea
kettle" stills, they consisted of a large iron drum and a long
tube which acted as a condenser. Capacity of these stills ranged from 1 to
100 barrels a day. A coal fire heated the drum, and three fractions were
obtained during the distillation process. The first component to boil off was
the highly volatile naphtha. Next came the kerosene, or "lamp
oil", and lastly came the heavy oils and tar which were simply left in
the bottom of the drum. These early refineries produced about 75% kerosene,
which could be sold for high profits. (Giddens, p.14)
Kerosene was so valuable because of a whale shortage that had began in
1845 due to heavy hunting. Sperm oil had been the main
product of the whaling industry and was used in lamps. Candles
were made with another whale product called "spermaceti". This shortage
of natural sources meant that kerosene was in great demand. Almost all the
families across the country started using kerosene to light their homes.
However, the naphtha and tar fractions were seen as valueless and were
simply dumped into Oil Creek. (I would like to point out that these first
refineries were not operated by chemical engineers!)
Later these waste streams were converted into valuable products. In
1869 Robert Chesebrough discovered how to make petroleum jelly and called
his new product Vaseline. The heavy components began being used as
lubricants, or as waxes in candles and chewing gum.
Tar was used as a roofing material. But the more volatile
components were still without much value. Limited success came in
using gasoline as a local anesthetic and liquid petroleum gas
(LPG) in a compression cycle to make ice. The success in refined
petroleum products greatly spread the technique. By 1865 there were
194 refineries in operation.
John D. Rockefeller
In 1862 John D. Rockefeller financed his first refinery
as a side investment. He soon discovered that he liked the petroleum industry,
and devoted himself to it full time. As a young bookkeeper Rockefeller
had come to love the order of a well organized ledger. However, he was
appalled by the disorder and instability of the oil industry.
Anyone could drill a well, and overproduction plagued the early industry.
At times this overproduction meant that the crude oil was cheaper than
water. Rockefeller saw early on, that refining and transportation, as
opposed to production, were the keys to taking control of the industry.
And control the industry he did!
In 1870 he established Standard Oil, which then controlled 10%
of the refining capacity in the country. Transportation often encompassed
20% of the total production cost and Rockefeller made under-the-table deals
with railroads to give him secret shipping rebates. This cheap
transportation allowed Standard to undercut its competitors and
Rockefeller expanded aggressively, buying out competitors left and right. Soon
standard built a network of "iron arteries" which delivered oil across the
Eastern U.S. This pipeline system relieved Standard's dependence upon the
railroads and reduced its transportation costs even more. By 1880
Standard controlled 90% of the country's refining capacity. Because of
its massive size, it brought security and stability to the
oil business, guaranteeing continuous profits. With Standard Oil, John D.
Rockefeller became the richest person in the World.
So What?
But what came out of all this activity? In short the early petroleum
industry:
Brought a revolution in lighting with kerosene.
Helped keep machines in good conditions with lubricants. (it
was the "Machine Age" after all)
Provided a new source of national wealth (in 1865 it was the countries
6th largest export).
Aided the Union in the Civil War by strengthening the economy (also
petroleum was used to treat wounded soldiers at the battle of Gettysburg).
A Few Terms
The petroleum industry, like other chemical industries, has a plethora of
terms designed to scare off anyone who wants to understand exactly
what is going on. Mastering this nomenclature is one of the main tasks facing
chemistry and chemical engineering students. Here are a few commonly used
terms, but be forewarned; because of the complexity of compounds in the
petroleum industry some of these terms are very vague.
Hydrocarbons are chemical compounds made mainly of carbon and
hydrogen. Both petroleum and coal contain many different hydrocarbons.
Methane, ethanol, and benzene are examples of hydrocarbons, though there are
many many others.
Bitumen is a another term for hydrocarbons. Both petroleum and
coal are sometimes referred to as Bituminous.
Organic compounds are chemicals made of carbon (although the
classification is not totally consistent and some carbon compounds, like carbon
dioxide, are not considered organic). Hydrocarbons are commonly referred
to as organic compounds, and it is fair to think of the two as equivalent.
Carbohydrates, proteins, and urea (found in urine) are examples or organic
compounds. It was once thought that organic compounds could only be produced
from organic sources. Because of their usefulness, a huge chemical industry
developed around organic chemicals during the 19th Century. Dyes
and pharmaceuticals where products of this industry. As chemists
increased their skills they found that organic compounds could be synthesized
from inorganic sources. However, by this time the classification had been firmly
rooted in industry and universities and so it remains today.
Inorganic compounds include everything that is not
considered organic (every compound in the world is ether organic or
inorganic).
Aromatic compounds are organic compounds which always have a
benzene ring in them. Because of this they can be quite reactive and
have some interesting properties. The dye and pharmaceutical
industries depend heavily on aromatic compounds.
Aliphatic compounds are organic compounds which are not
aromatic. They include single bonded (ethane, propane, butane), double
bonded (ethene or called ethylene, propene, butene), and triple bonded (ethyne
or called acetylene, propyne, butyne) straight chain hydrocarbons as well as
cyclic non-benzene structures (cyclopentane, cyclobutane) (every organic
compound in the world is either aromatic or aliphatic).
A Barrel (bbl.) of crude contains 42 gallons or 158.8 liters.
No one actually ships petroleum in barrels anymore because they are too small,
but the term is still used to describe a defined volume.
Petroleum literally means "rock oil". It is a very broad word
referring to all liquid hydrocarbons which can be collected from the
ground. Even natural gas and solid hydrocarbons are sometimes
referred to as petroleum. When petroleum first comes from the ground it is
called crude oil. Later it is usually just referred to as oil. It
can flow like water or be as viscous as peanut butter. It can be yellow, red,
green, brown, or black.
Fractions are complex mixtures of chemical compounds that all
have a similar boiling point. Light and heavy fractions
refer to a compound's boiling point and not their actual
density (these are two entirely different things). Light fractions can be
very heavy (dense), and heavy fractions can be very light (go figure)!
Isomers are chemicals which have the same number and type of atoms
but have them arranged in a different way. Methane (CH4), ethane (C2H6),
and propane (C3H8) have no isomers because their is only one way the carbons can
hook together. Butane (C4H10) has two isomers (n-butane and
isobutane). Decane (C10H22) has seventy five isomers, and a
molecule with 20 carbon atoms (C20H42) has over 100,000 isomers.
Crude oil contains molecules having 1 to 100+ carbon atoms. Naming
these compounds based upon normal chemical rhetoric would be hell on earth!
The huge number of possible molecular arrangements is why people talk of
fractions instead of using proper chemical nomenclature.
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